What's the point of an allowance?

For Ron Lieber, personal finance writer for The New York Times,it'sa tool to help teach values and character traits like patience, moderation, thrift and generosity. And Lieber, who's writing a book, The Opposite of Spoiled, about kids, money and values, tells Morning Edition host Steve Inskeep there are three basic ways that parents approach an allowance.

No chores necessary.

This is the method that Lieber and his wife use. They give their 7-year-old daughter $3 a week, which she divides in thirds. She puts $1 into a "spend" jar to buy anything that she wants, $1 into a "save" jar for medium- to long-term goals and $1 into a "give" jar that ultimately goes to a cause of her choosing. "She spends a lot of time thinking about that," Lieber says.

He says this approach has fostered a sense of confidence and empowerment in his daughter, who, on a recent shopping trip, "was so thrilled at the idea that she had the power to make some decisions for herself, and that I or my wife wasn't going to have anything to do with it."

No free money.

A second way to approach allowance is to link it to the performance of chores. "The thinking here," Lieber explains, "is that nobody gets free money in the world, and neither should my kids, and that would spoil them."

Lieber counters that an allowance is a teaching tool. "We don't want to couple it to labor, because the problem you run into then is that if your kids decide that they're not really so interested in money or having money after all, can they then decline to do the basic chores?" he says.

No allowance at all.

Some parents give no allowance and instead take a "reasonable request" approach. In other words, parents buy their kids what they need and then require that for things they want, they must make a persuasive presentation.

"They learn to literally make a sales pitch, and then the parents decide on a one-off basis whether or not the kids ought to have it, or whether they ought to find a way to make some kind of money on their own in order to buy it," Lieber says.

Parents in Morning Edition's Facebook community use strategies similar to these when it comes to giving — or not giving — an allowance. And the comments show that disbursing allowance dollars has caught up with the digital age. Some parents make direct deposits into their teen's bank account, and withdrawals are made with a debit card. One commenter uses a virtual banking app that helps parents and kids keep track of chores, deposits and withdrawals. There are other apps, too.

NPR wants to know: Do you give an allowance to your kids? Please answer in the comments section.

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